Sept 22 (Reuters) - Global ratings agency Fitch upgraded Sri Lanka's long-term foreign-currency default rating to 'B-' from 'CCC+' on Tuesday and kept its outlook stable, citing policies and structural reforms that have eased external financing risks.
"The upgrade reflects the implementation of macro-stabilization policies, underpinned by structural reforms, which have eased external financing risks and provide a degree of resilience to shocks," the agency said in a statement.
However, Fitch warned that Sri Lanka's credit profile remains hindered by still-high debt and debt service ratios, while foreign-exchange reserve buffers stay modest.
For Sri Lanka, which imports all its fuel, high energy prices driven by the US-Iran conflict are also expected to push the current account into deficit in 2026 after three years of surpluses, though steadily rising remittances are helping offset the pressure.
Fitch said the sovereign's economic growth has remained resilient despite these pressures, with financing from the IMF and other multilateral agencies providing a steady external support to mitigate near-term current account strains.
